Financial institutions are increasingly clearing financial transactions using electronic systems such as the Automated Clearinghouse (“ACH”) network. The ACH network is a nationwide electronic funds transfer system supported by several operators, including the Federal Reserve Banks and other institutions. The ACH network is governed by a set of rules administered by the National Automated Clearinghouse Association (“NACHA”). ACH offers financial institutions, companies, consumers, and others an efficient alternative to paper based payment methods.
In ACH, an originator sends electronic transaction items to an originating depository financial institution (“ODFI”). The originator is a person or organization that agrees to initiate ACH payments in the ACH network according to an arrangement with another, receiving person or entity (a “receiver”). For example, the originator can be a company that agrees to originate an ACH payment to an account of a consumer.
The ODFI packages the transaction items in one or more batched ACH files, according to the NACHA rules. The ODFI transmits the ACH files to an ACH operator. The ODFI may send the ACH files to the ACH operator directly or via a third party or “remote” sending point. The third party or remote sending point may be a depository financial institution or a company providing processing services for a depository financial institution. The term “ACH file” is used herein to refer to any collection of batched and/or unbatched ACH transaction items.
The ACH operator is a Federal Reserve Bank or other entity that receives ACH files from an ODFI and distributes transaction items within the ACH files to at least one corresponding receiving depository financial institution (“RDFI”) associated with a receiver. In some cases, the ACH operator also may perform settlement functions (crediting and debiting of accounts) for the affected financial institutions.
Each ACH file includes at least one batch of transaction items. Each batch includes one or more transaction items. The terms “transaction item” and “ACH item” are used interchangeably herein to refer to any batched electronic payment or payment instruction, whether international or domestic, and/or information associated with a batched electronic payment or payment instruction. For example, a payment or payment instruction can be a credit, a debit, or a rejected or returned transaction.
Upon receiving an ACH file, processors of the ACH operator sort, batch, and re-assemble the transaction items in the ACH file in at least one new ACH file for delivery to one or more RDFI's. The RDFI's may receive the ACH files directly or via one or more third party or “remote” receiving points. Each third party or remote receiving point may be a depository financial institution or a company providing processing services for a depository financial institution. The RDFI's forward the transaction items in the ACH files to their corresponding receivers. Each receiver is a person or organization that has authorized an originator to initiate an ACH payment to an account of the receiver, at the receiver's RDFI.
Traditionally, ACH operators include multiple mainframe processors, which process ACH files, file by file, on a first in, first out basis. Each ACH file is processed by a single one of the mainframe processors. Because each ACH file can include a varying number of batches with a varying number of transaction items, each mainframe processor can bear a different processing load. For example, one mainframe processor may process an ACH file with only a single transaction item, while another mainframe processor may process an ACH file with multiple batches including large amounts of transaction items. Thus, at least some mainframe processors may be over-loaded or under-loaded. This results in many processing inefficiencies, including ineffective use of the under-loaded mainframe processors and delays in processing of transaction items handled by the over-loaded mainframe processors.
Therefore, a need exists in the art for a system and method for efficiently processing ACH payments.